Social Security Programs


Social security is a concept based on Article 22 of the Universal Declaration of Human Rights which stipulates that the society should give people support to develop socially, economically and culturally. Therefore, the governments of different countries have come up with programs that are geared towards promoting the welfare of the people. As such, the people’s access to resources has been guaranteed. In most cases, social security programs are created for the vulnerable groups such as the elderly, the unemployed, children and the sick. Social security programs in the U.S have been expanded and improved over the years to include basic security, government services and social insurance. Sometimes, government services can be designated to agencies. The government services may include financial support in times of sickness, unemployment and upon retirement, and medical care.

The Concept of Social Security as Originally Envisioned by President Roosevelt

In 1934, the then-President of the U.S thought of social security programs that would benefit some of the vulnerable groups in the country. President Roosevelt envisioned a plan, where workers made contributions that would form a basis of future economic security. Therefore, Roosevelt formed the Committee on Economic Security (CES), which was to carry out a study on the need for an economic security program for the disabled and the elderly in the U.S. Since members of the family were providing care for those who could not work in the majority of cases, Roosevelt saw the need for a national system. According to Roosevelt, support from members of the family was not sufficient to help the elderly live comfortably. Therefore, the program needed to be supplemented by support from the government. In January 1935, a report giving an outline of a national economic security program was issued to Roosevelt by the CES. The report was adopted and passed by the Congress on the August 14th, 1935, becoming the Social Security Act (SSA).

Under the SSA, a social insurance program was created to care for various individuals. People at the age of 65 and above, who were no longer working, were provided a monthly benefit. The amount given to a person was based on the individual’s payroll tax contributions. Dependent children were also taken care of through unemployment insurance and medical care. In order to control the implementation of the program, the Social Security Board was set up. The board was charged with the responsibility of enrolling employees, reporting the employees’ earnings and collecting the employees’ payroll tax contributions. The monthly benefits did not start until 1942. However, Wise (2012) notes that between 1937 and 1942 retiring employees, who had been paying into the social security but did not have sufficient amounts to qualify for monthly benefits, were paid single lump sums. The implementation of the SSA saw the social security program that President Roosevelt envisioned come into reality. Although the initial program started by President Roosevelt covered just but a small percentage of the population, it was a good start.

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The Viability of Social Security within the Next 20-30 Years

As it has been mentioned in the paper, social security programs in the U.S have been expanded and improved over the years. The changes and upgrades have come at a cost as the U.S citizenry has been forced to dig deeper into their pockets to finance social security programs. However, the crucial question is about the viability of the social security within the next 20-30 years. The truth is that viability of social security is at risk because of unpredictable demographics. For social security to be successful, there must be sufficient funds to support it. Funds that maintain social security come from taxes on the income of the employed workers in the country. However, a projection of the demographic pattern in the next 20-30 years shows that the percentage of the working population will be lower compared to the current situation. Thus, in order to maintain the same programs that exist today, social security taxes will go up. With fewer workers to support beneficiaries of social security, many programs are likely to be affected. Furthermore, the support of the younger population to the country’s social security has not been consistent, and therefore is not reliable. Most of the young populations start thinking about social security when they are much older. With such trends, the viability of social security is not guaranteed.

Recommendations That Would Improve the Viability of Social Security

It is evident that the viability of social security in the country is under the threat. Therefore, remedial measures have to be put in place before the situation gets out of hand. The first step to be taken should address the raising of additional funds to support social security programs. The ever-increasing population in the country shows that the amount of funds channeled to social security programs have to be increased at least proportionately. Secondly, cutting down on the benefits for people who have big pensions would also contribute to viability of social security. For instance, there are people whose pension incomes exceed $250,000. The amount is excessively large considering that what many retirees in the country receive is way below $250,000. Therefore, the people with such large pensions should be willing to receive less so that reduced amounts can be carried forward to finance future social security programs. Last but not least, social security surpluses should not be diverted to other uses. Although the government has many pressing issues to address within a limited budget, all social security surplus should not be spent in other areas. Instead, the surplus should be saved for the future.

How Best These Recommendations Can Be Implemented

It should be noted that an ample political environment is needed for the three recommendations to be implemented. On the recommendation to raise more funds for social security, the political environment should support all efforts that are directed towards educating the young populations on the importance of their contributions even at early ages. While taxation has always been used as a means of decreasing the gap between high-income earners and low-income earners, increasing taxation on the high-income earners is necessary. Given that taxation rates in the country are very high; such a move may meet opposition from the country’s citizenry. Therefore, support from the political environment in making the citizenry see into the need for more sacrifice is required for the implementation of the recommendation. The political environment should also be committed to the creation of more jobs since it will contribute to widening the tax base.

The recommendation to reduce the benefits for people with large pensions affects the high-income earners in the society. For instance, as Muller, Early & Ronca (2014) established, the benefits for people who have pension incomes exceeding $250,000 can be cut down by 25%, while that those exceeding $500,000 can be cut down by 50%. However, it should be noted that most of the high-income earners either constitute the political class or are closely related to the political class. Therefore, it takes the support of the political environment to implement the recommendation.

The third recommendation that social security surplus should not be diverted to other uses, as the surplus should be carried forward. With projection that costs to support future social security programs will go up because of a smaller percentage of workers, all surpluses should be saved for such times. There have been reports that social security surpluses have been invested in government securities in the past but no follow up has been made to recover it. Therefore, all social security surpluses that will be invested in the future should be recovered. Since, the political environment is always keen on how money is spend, there should be clear communication on what should be done with such surpluses so that confusions are avoided.

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